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Takeover on the horizon? Brenntag makes preliminary indication of interest for Univar Solutions

December 3, 2022
Consumer Packaged Goods

German chemicals distributor Brenntag has confirmed potential takeover talks with US rival Univar Solutions and is understood to be debating the feasibility of a potential acquisition in the coming months. Although the two giants remain guarded about the details of exploring this possible takeover deal, Univar Solutions confirms that it has received a preliminary indication of interest from Brenntag regarding a potential transaction.

“The company does not intend to make any additional comments regarding this matter unless and until it is appropriate to do so,” a Univar Solutions statement says.

This comes after Brenntag chief executive Christian Kohlpain had earlier hinted the company was eyeing mergers and acquisitions, looking to double annual spending in this direction.

“Brenntag sees strategic mergers and acquisitions as an enabler of future growth and thus will double the annual planned M&A spend to around €400 to €500 million (US$419 to US$524 million),” he said earlier this month as part of the highlighting of Brenntag’s growth strategy plans and targets for 2026.

Strategic growth plan
Brenntag has already laid out its plans to play a crucial role in the “ecosystem of sustainable global chemicals and ingredients distribution.”

A company statement about strategic growth plans and new medium-term targets until 2026 made it clear that Brenntag is focused on capturing new market potential through mergers and acquisitions and increasing its portfolio for sustainable products and supply chain solutions.

“Brenntag’s acquisition strategy will be focused on five key pillars, such as accelerating growth in Life Sciences globally, enhancing strategic capabilities and market positions, expanding positions in emerging markets in both divisions, filling white spots to complement the existing portfolio and improving tech capabilities that enable efficiency gains,” it says.

New branding
During an announcement about Brenntag’s new branding on November 10, Kohlpain said the company’s new strategy marks “the next chapter of transformation” and clarified its intention to “shape the future of its industry.”

Brenntag says its history of almost 150 years is strongly focused on transport and logistics. By contrast, the new brand reflects Brenntag’s development “beyond mere chemical and ingredients distribution” to providing innovation support, value-add services, application know-how and sustainable products and solutions on a global scale as well as its ongoing transformation to a data-driven company with leading digital customer experience.

Univar Solutions moves
At the beginning of November, Univar Solutions also reported its third-quarter 2022 highlights, which showed a substantial net income of US$130 million, 54% higher than the US$84.4 million reported in the prior year.

Univar Solutions – which changed its name to Univar Solutions following the acquisition of Nexeo Solutions in 2019 – also reported net sales of US$3 billion.

At the time, David Jukes, president and chief executive, said he had spent the last three years transforming the company into a reliable solutions provider while also driving impressive financial results.

“We remain focused on delivering on our business strategy, leveraging our global strength in Ingredients and Specialties, and our strong position in North America. We also are focused on executing a capital allocation strategy that is balanced between investments in global growth and share repurchases, all with the goal of enhancing long-term shareholder value,” he explained.

In early summer, Univar Solutions launched Foodology by Univar Solutions, an expert team focused on the distribution and technical innovation solutions of food and nutritional ingredients and the acceleration of food products to market.

During the IFT trade show in Chicago, FoodIngredientsFirst caught up with Univar Solutions executives to discuss the launch in more detail and examine the distribution and technical innovation needs of food and nutrition ingredients businesses.

In May, the company also dived into the clean label trends for citrus fiber and plant-based milk enzymes.

By Gaynor Selby


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